Reference no: EM132939262

Problem 1: Received RM15,000 from Ikhlas Ali Sdn Bhd (IASB) as a settlement of their outstanding debts will be recorded in the journal as:

I. Debit IASB & Debit Bank

II. Debit IASB & Credit Bank

III. Credit IASB & Credit Bank

IV. Credit IASB & Debit Bank

Problem 2: ZISB paid electricity RM1,000 using the company cheque. The effect of these transactions on ZISB's Income Statement and Balance Sheet would be:

(a) Reduce Profit & Reduce Owner's Equity

(b) Increase Profit & Increase Owner's Equity

(c) Increase Profit & Reduce Owner's Equity

(d) Reduce Profit & Increase Owner's Equity

Problem 3: As per mentioned below are the purpose of preparing Trial Balance except:

(i) To check whether the business transactions have been accurately posted to each ledger account.

(ii) To facilitate the accountant in preparing the financial statements

(iii) To check whether debit balances equal credit balances

(iv) To check whether any error has been made or not

(a) (i), (ii) & (iii)

(b) (i), (iii) & (iv)

(c) (i), (ii), (iii) & (iv)

(d) (i), (ii) & (iv)

Problem 4: What are the appropriate transactions to record the payment of RM12,000 car insurance in advance via cheque?

(a) Dr. Insurance & Cr. Bank

(b) Dr. Insurance & Cr. Prepaid Insurance Charges

(c ) Dr. Prepaid Insurance Charges & Cr. Bank

(d ) Dr. Prepaid Insurance Charges & Cr. Insurance Charges

Problem 5: What would be the effect of not recording Accrued Telephone Charges in the company account?

(a) Understate Net Profit & Overstate Liabilities

(b) Understate Net Profit & Understate Liabilities

(c ) Overstate Net Profit & Overstate Liabilities

(d ) Overstate Net Profit & Understate Liabilities